Global venture funding in 2024 will be slightly higher than 2023 total, with AI showing the largest year-over-year growth. Based on an analysis of Crunchbase data, overall startup funding in 2024 reached nearly $314 billion, an increase of about 3% compared to $304 billion in 2023.
Global venture investment in 2024 was higher than in 2019 before the pandemic, but the amounts in 2018 and 2020 were lower than $346 billion and $350 billion, respectively.
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A year of breakthroughs in AI
One thing is clear: 2024 was the year that funding for AI companies exploded.
Artificial intelligence has become a major area of funding, with nearly a third of global venture funding going to companies in AI-related fields. Funding for AI companies reached more than $100 billion, up more than 80% year over year from $55.6 billion in 2023, according to data from Crunchbase. Funding for the AI sector in 2024 exceeded every year of the past decade, including 2021, the peak of global funding.
Of these AI funds, nearly one-third of the AI funds went to foundational model companies.
The remaining two-thirds of the funds went to sectors affected by these new models. The provisioning of infrastructure and data to manage and operate AI has grown. Other key sectors include autonomous driving, healthcare, robotics, professional services, security, and military, according to Crunchbase data.
4th quarter push
The increase in 2024 totals was driven by a strong boost in the fourth quarter, making it the highest total funding since the economic downturn in Q3 2022. It reached $93 billion in the fourth quarter, an increase of 36% year-on-year from $69 billion in the fourth quarter of 2023. Analyzing Crunchbase data.
The fourth quarter has been slower than usual in recent years. However, the fourth quarter of 2024 ended with the largest fundraising of the year, $22 billion by three companies.
Big value, $1 billion round
In 2024, the bulk of the funding went towards a $1 billion round. This was primarily due to funding for the AI sector. In 2024, $58.3 billion, or 19% of all funding, went into $1 billion rounds. Compare that to 2023. In 2023, 15% of funding, or $45.8 billion, was used to raise more than $1 billion.
Momentum increased in the fourth quarter, delivering the highest valuation of last year. OpenAI was valued at $157 billion. Databricks was valued at $62 billion in a $10 billion round, the largest venture deal of the year. And xAI’s valuation doubled in six months to $50 billion.
Unsurprisingly, the largest funding rounds of the past year went to companies in the AI sector. Databricks, OpenAI, and xAI, as well as Waymo and Anthropic, have raised at least $4 billion and possibly more.
Other high valuations for companies in the AI space include CoreWeave ($19 billion), Anthropic ($18.4 billion), Anduril Industries ($14 billion), Scale AI ($13.8 billion), and Perplexity ($9 billion). It was there.
America wins and Silicon Valley rises
Venture funding to US companies totaled $178 billion, or approximately 57% of total funding worldwide. The US funding market has increased its share of global funding, up from 48% in 2023.
Of all US funds, $90 billion was invested in the San Francisco Bay Area corridor, which has experienced a boom in AI investment. Compare that to 2023, when Bay Area companies raised a total of $59 billion.
Boom late in the fourth quarter
Late-stage funding reached $61 billion in the fourth quarter, an increase of more than 70% quarter-over-quarter and a year-over-year increase from $36 billion in investments in Q4 2023. Crunchbase data shows. The biggest change in the fourth quarter compared to the same period last year was an increase in $1 billion rounds. Significant funding was raised across multiple sectors including AI, applied AI, energy, semiconductors, banking, security, and aerospace.
initial flat
Early stage funding was flat in the fourth quarter. Large early rounds went into data centers, renewable energy, AI, robotics, and biotech.
Seeds have taken root
So far, seed funding has continued into the fourth quarter. Seed funding reached $7 billion in the fourth quarter, down 16% from $8.4 billion a year ago. (However, seed funding is often added to the Crunchbase dataset after the end of a quarter and should grow over time.)
liquidity holdup
It has been a slow year for the country’s departure in 2024.
M&A activity increased slightly compared to 2023, but slower than expected and somewhat concentrated in biotech and cybersecurity companies.
Among the Grand Seven, Microsoft, Alphabet, and Amazon hired AI teams at Inflection AI, Character.ai, and Adept AI, respectively, as the regulatory environment impeded strategic deals. Nvidia was the most active acquirer in this group in 2024.
The IPO market will continue to be sluggish in 2024, but it ended on a positive note due to the unexpected rise from the ServiceTitan IPO, with the stock trading more than 40% above the IPO price at the beginning of the year.
Beazer Clarkson, a partner at Sapphire Ventures, said in an interview that the opening of the IPO market in 2025 will encourage the allocation of LPs to ventures. “History clearly shows that when liquidity is positive, more money flows into venture funds,” she says.
methodology
The data included in this report comes directly from Crunchbase and is based on reported data. Data reported is as of January 3, 2025.
Note that data lag is most noticeable in the early stages of venture activity, when the amount of seed funding increases significantly after the end of a quarter or year.
Please note that all funding amounts are expressed in U.S. dollars unless otherwise stated. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date the financing round, acquisition, IPO, or other financial event is reported. Foreign currency transactions are converted at historical spot prices, even if events are added to Crunchbase long after they are announced.
Fundraising glossary
Seed and Angel consists of Seed, Pre-Seed, and Angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding, and convertible debt of up to $3 million (in U.S. dollars or converted U.S. dollar equivalents).
The initial phase consists of Series A rounds and Series B rounds, as well as other round types. Crunchbase includes unknown series venture rounds, corporate ventures, and other rounds above $3 million and under $15 million.
Later stages consist of Series C, Series D, Series E, and later character venture rounds following the “Series (Character)” naming convention. Also included are unknown series venture rounds, corporate ventures, and other rounds over $15 million. Corporate rounds are only included if a company has raised seed equity funding through a Venture Series funding round.
Technology growth has been raised in private equity rounds by companies that previously raised “venture” rounds. (So basically all rounds of previously defined stages.)
Illustration: Dom Guzman
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